The glass industry is whining as EU gas shortage threatens vaccine supplies
The EU is walking hard on the tightrope of “cutting gas”, and no one knows that the last turbine will not have an accident, let Russian gas say goodbye to Europe.
Although EU countries have not yet entered the rationing system, the North Stream No. 1 pipeline, which continues to maintain a low flow, is always a reminder: the energy crisis is imminent.
Many industries have already started to turn on the yellow light of “stop production”, such as glass manufacturing.
The pain of glass
According to the German Glass Association, each factory in the glass industry will face a loss of 50 million euros if Russia stops supplying natural gas.
A very prominent feature of the glass industry is that the furnaces that melt glass need to work 24 hours a day, and once cooled, it can cause damage to production facilities. It also means that once the supply of natural gas as an energy source ceases, the entire plant must cease operations and bear the losses.
To ensure that production facilities are not irreversibly damaged, plants must have 70 percent of their maximum flow of natural gas, the association added. Once production is stopped, it will lead to the destruction of the production system and even the risk of explosion in the factory. The reconstruction of the factory may take a few months at a minimum and a maximum time of two years, which is definitely a heavy blow to the entire European market.
Glass materials are mainly used in containers. In the past few years, the sales share of glass containers accounted for 50% of glass products. But glass isn’t just about containers, it’s now used in industries such as wind turbines, semiconductors, and food.
The stoppage of glass means that supply chains in the European food, pharmaceutical, medical, automotive, solar and construction industries will be disrupted at the same time. In some special categories, the suspension of production in Europe even means a global shortage of downstream products.
Luxury is abandoned first
Founded in 1756, Riedel, the world’s oldest glass manufacturer, specializes in luxury wine glasses and decanters. Its two factories in the southern German cities of Amberg and Weiden have the capacity to produce 60 million units of glass, while its other factory in Kufstein, Austria, can produce 250,000 units of handmade glass.
According to Riedel, its energy bills have already risen by 30%, and it will need to invest at least 20 million euros to maintain production in 2022, double the previous budget. Adding to the anxiety, no gas supplier is willing to sign long-term contracts with it now, and it can only buy energy on a daily basis.
As the bottle supplier of European wine, once glass manufacturers such as Riedel “hibernate”, it is difficult for European wine to go to market smoothly. Europeans may be able to drink from wooden cups, but people in other countries will probably only have no access to fine wine.
According to Barbie Kornelia Haller, vice-president of Germany’s federal network agency BNetzA, if natural gas is rationed, social services such as homes and hospitals will be given top priority, followed by heating, food and medical supplies.
Glass makers like Riedel won’t be a priority for future government gas rationing, and only those making necessities — such as glass for vaccine vials — are likely to be guaranteed a supply.
Dangers of Necessities
The world’s largest glass maker by market value is France’s Saint-Gobain. Its core business includes the design, manufacture and distribution of glass products for automotive, home and office applications. If it is interrupted gas supply, for Europe, there will be gaps in upstream materials for many industries.
Other glass-producing companies have greater influence, such as Germany’s SCHOTT.
SCHOTT is an oligopolistic manufacturer of borosilicate glass, which is widely used in the pharmaceutical industry as containers for medicines and vaccines. In my country, low borosilicate glass is mostly used, but its chemical stability and toughness are poor, and it is very easy to react with medicines and contaminate medicines. However, in recent years, my country has not achieved technological breakthroughs in borosilicate glass, which also makes the vaccine bottle market monopolized by several large companies.
SCHOTT’s market share in the global vaccine glass bottle can reach 50%, and it, together with Japan’s NEG Company and the US Corning Company, together account for about 90% of the global vaccine bottle market share.
SCHOTT’s largest production base in the world is in Mainz, Germany, which also means that once the natural gas supply in Europe is cut off, the global vaccine bottle is likely to report a shortage again.
This will be a huge blow to countries such as Europe and the United States that are in urgent need of a monkeypox vaccine. And this will also be a huge blow to the world that needs a vaccine to continue to fight the new coronavirus.